Carl Icahn abandons effort to kill Cigna's Express Scripts deal

Carl Icahn has given up on his attempt to sabotage Cigna's takeover of Express Scripts.

The activist investor had called on other Cigna(CI) shareholders to vote against the $67 billion deal. He argued that the health insurer is massively overpaying for a "highly challenged" Express Scripts(ESRX), which faces existential risks.

But Icahn's push suffered heavy setbacks when influential shareholder advisory firms ISS and Glass Lewis both came out in favor the takeover.

His firm Icahn Capital said in a statement late Monday that "in light of the ISS and Glass Lewis recommendations" it's dropping its efforts to persuade shareholders to oppose the deal.

Icahn also said in the letter that he was worried about the Trump administration's efforts to rein in drug costs, coupled with proposals to limit the ability for drug manufacturers to give rebates to pharmacy benefits managers such as Express Scripts, which is key to their operations.

But ISS and Glass Lewis both said they thought the deal made sense for Cigna's strategy and was "financially compelling."

The merger could give Cigna more control over drug prices, which is a major issue for insurers. Rival insurer Anthem said last year that it would partner with CVS to start its own prescription drug plan manager. And UnitedHealth(UNH) already has its own drug benefits manager, OptumRX.